At a glance
Kristen Beadle, CPA Australia’s public practice and small and medium enterprises manager, discusses challenges facing the construction industry, the skyrocketing rate of insolvencies and what it means for the industry’s future.
A grim picture
“Every generation, there’re these issues in the economy because it’s cyclical. But I think we’re looking probably now at a once-a-century type issue here.”
“We’ve heard that there’re wood shortages, for example, so timber shortages. But we’re looking at things like 30 per cent of the wood used for pallets comes from Ukraine, and that’s what you transport bricks on for example, and all the goods that you put into a kitchen, bathroom and that sort of stuff.
We’ve got a national shortage of truck drivers and forklift drivers at the moment in Australia. Goods that are taking eight days to ship are now taking six weeks and shipping container prices have increased by 500 per cent to 600 per cent.
So it takes that long and it’s that much to get it to a construction site and then you’ve got no one to put it actually into and make it into a home.”
“If after speaking to your CPA, there is no viability in the business and you should be looking at some kind of insolvency administration, it's then key to speak to a registered liquidator or bankruptcy trustee, because they're the only ones qualified to assist you through that process and give you the correct advice.”
Richard Webb, CPA Australia’s financial planning and superannuation policy adviser, explores the recent superannuation overhaul, how it impacts small businesses, employers and employees, and more.
Super guarantee to 12 per cent
“The superannuation guarantee is being progressively increased to 12 per cent. And this year and last year as you observed, the increase has been progressively going up in half per cent increments.
There are a few things that I think practitioners and their clients will need to actually look at.
Small business clients probably should be alerted to the superannuation guarantee rate changes.
It's worth reminding business clients that some contractors are entitled to superannuation guarantee contributions from their employer, even if they have an ABN as our temporary residents.”
“Another group of employees who might do quite well out of the 1 July changes to superannuation are workers on lower incomes. And that’s because the minimum threshold for superannuation payments, which was set at A$450 a month is going to go, meaning that super will be paid on every dollar an employee earns.”
Downsizer contribution age decrease
“The whole idea of the downsizer scheme was to allow Australians who were looking to increase their superannuation to do so through the sale of their house.
And they could do that up to a total of A$300,000. And at the moment, that would be for people who are 65 years of age. But of course from 1 July this year, that is going to come down to 60-year-olds.”
How does downsizing link to housing affordability?
“Prices of houses like most things, are the product of both supply and demand factors. So what the downsizer contribution does . . . is to provide an incentive to release more housing stock onto the market.
And hopefully, this should reduce pressure on housing affordability to some extent.”
Preparation is key
“Businesses in particular should consider seeing their accountant in the first instance just to get all the technical information about what it is that they can do to comply with the changes.
For employees, though, and retirees, we would suggest that your financial adviser is probably the best person to go to for queries about superannuation and any contributions associated with that as well.”